Statement of changes in working capital, Cost Accounting

Assignment Help:

A statement of changes in working capital assists us in locating where such changes took place. In the first example we try to demonstrate the increase or decrease in particular items and then try to categorize them in terms of decrease and increase in working capital. As working capital is measured through subtracting current liabilities from current assets, any raise in current assets and any reduce in current liabilities demonstrates a raises in working capital. Likewise, reduce in current assets and a raise in current liabilities represent a decrease in working capital.

 The statement of changes in working capital as Table no.1 explains that the raises in current assets amounted to Rs. 52 million, a main part of the increase occurring out of cash, inventory and receivable. Reduce in working capital came about mainly from the increased accounts payable, advances taken from customers and taxes payable. Total amount of reduce in working capital resulting from raise in current liabilities amounted to Rs. 25 million, hence showing a net raise in working capital of Rs. 27 million.

TOLLS INDIA LTD.

Statement of changes in Working Capital for the year ending December 31, 2000

                  (Rs. In Millions)

 

Dec. 31

2003

 

Dec. 31

2002

Increase

(Decrease)

Working Capital

Increase  Decrease

Current Assets

 

 

 

 

 

Cash

19.05

 

10.87

8.18

8.18

Accounts receivable

32.25

 

20.28

11.97

11.97

Loans and advances

42.58

 

33.82

8.76

8.76

Other current assets

17.20

 

15.93

1.27

1.27

Inventory

120.92

 

99.10

21.82

21.82

Total

232.00

 

180.00

52.00

 

 

 

 

 

 

Current Liabilities &

 

Provisions

Acceptances

4.74

 

3.02

 

 

1.72

 

 

1.72

Accounts payable

27.16

 

18.75

 

 

8.41

 

 

8.41

Advances against sales

26.60

 

20.28

 

 

6.32

 

 

6.32

Other liabilities

8.86

 

7.95

 

 

0.91

 

 

0.91

Interest accrued

2.64

 

2.00

 

 

0.64

 

 

0.64

Taxes payable

25.55

 

20.45

 

 

5.10

 

 

5.10

Proposed dividend

2.25

 

2.25

 

 

-

 

 

-

Bonus payable

3.40

 

2.35

 

 

1.05

 

 

1.05

Other provisions

3.80

 

2.95

 

 

0.85

 

 

0.85

Total

105.00

 

80.00

 

25.00

 

52.00

 

25.00

 

 

 

Working Capital

 

 

 

127.00

 

 

 

 

100.00

 

 

 

 

 

 

27.00

 

 

 

 

Increasing Working Capital

 

 

27.00

 

 

 

 

 

 

 

 

 


Related Discussions:- Statement of changes in working capital

Find the total landed cost, What conclusion can you draw when comparing the...

What conclusion can you draw when comparing the total landed or delivered cost to the original purchase cost? What does this suggest about the importance of supply chain managem

Calculate cost for each unit, Dropping a segment - George's Grill analyzes ...

Dropping a segment - George's Grill analyzes profitability of three operating units: restaurant, bar, and billiards room. Revenues, variable costs, and attributable fixed costs (wh

What is the predetermined overhead rate, Morrow Company applies overhead ba...

Morrow Company applies overhead based on direct labor hours. At the beginning of the year, Morrow estimates overhead to be $620,000, machine hours to be 180,000, and direct labor h

Stock control and its level, Stock control and its Level Management m...

Stock control and its Level Management must formulate decisions regarding to the control of stock levels along with a view to minimizing the cost of the company whereas achie

Direct labour efficiency variances, Direct Labour Efficiency Variances ...

Direct Labour Efficiency Variances It is the difference between the standard hours allowed for the actual production achieved and the hours actually worked, all valued at THE

Overhead budgets for 2011., Atkinson's Reliable Tools makes two products th...

Atkinson's Reliable Tools makes two products that use similar raw materials: #587Q and #253X. Estimated production needs for a unit of each product follows. #587Q #253X Steel (in p

What is cmmi, Capability Maturity Model Integration (CMMI) is a process dev...

Capability Maturity Model Integration (CMMI) is a process development approach that gives organizations with the essential elements of effective processes. It can be used to gui

Last in first out or lifo, Last in first out or LIFO LIFO is based upo...

Last in first out or LIFO LIFO is based upon the assumption such the stock purchased last is issued first. Stock valuation should here be based upon the prices ruling on acqui

Marginal costing.., importance of marginal costing &standing costing

importance of marginal costing &standing costing

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd